1inch Network Launching USD-Pegged Stablecoin
- Called the one1INCH token, the new stablecoin will be “minted with a blend” of the platform’s native 1INCHG token and Centre’s USD Coin.
- The 1 inch Foundation will be contributing $100,000 worth of 1INCH as collateral for the stablecoin, effectively increasing the demand for the token.
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Popular DeFi project 1inch Network is planning to release a new stablecoin pegged to the U.S. dollar in partnership with the ICHI platform, 1inch said in a blog post on 1 July.
According to the announcement, 1inch will use ICHI’s Decentralized Monetary Authority (DMA) to create the one1INCH stablecoin, which will be “minted with a blend” of the 1INCH token and Centre’s USD Coin (USDC). The dollar-pegged stablecoin will be used as a medium of exchange for paying operation expenses, provide liquidity, and distribute rewards. The co-founder of the 1inch Network, Sergej Kunz, said in a statement:
“The one1INCH stablecoin can grow into an economic game changer. At scale, its treasury can drive value back to 1inch DeFi operations because it is minted and over-collateralized with 1INCH tokens.”
In order to increase the demand for the 1INCH token, the 1inch Foundation plans to contribute $100,000 worth of the token as collateral for one1INCH, which ICHI will match, so the stablecoin is minted using 20% 1INCH and 80% USDC. The new stablecoin can be minted and redeemed for a set value of $1.
ICHI’s DMA was designed to drive value back into crypto communities, by enabling them to mint new stablecoins through a mix of fiat-backed tokens and the community’s native token. The platform has positioned ICHI as the world’s first protocol that enables DeFi communities to create decentralized money-lending services.
- PayPal USD (PYUSD) will be issued by Paxos and the Ethereum blockchain, and is backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents.
- The company said the stablecoin can be redeemed for U.S. dollars at all times, and exchanged for any other crypto supported by the platform, including BTC, ETH, BCH, and LTC.
PayPal logo and sign in front of PayPal Holdings headquarters building in North San Jose Innovation District in Silicon Valley, San Jose, California, USA, 17 March, 2019. Michael Vi/Shutterstock
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